| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 199.06 | -64 |
| Intrinsic value (DCF) | 175.67 | -68 |
| Graham-Dodd Method | 1.55 | -100 |
| Graham Formula | 1.55 | -100 |
Science Group plc (LSE: SAG.L) is a UK-based science and technology consultancy firm offering specialized services across multiple industries, including medical, food and beverage, consumer goods, industrial, chemical, and energy sectors. Headquartered in Cambridge, the company operates through three key divisions: R&D Consultancy, Regulatory & Compliance, and Frontier Smart Technologies. Its expertise spans product development, scientific advisory, regulatory compliance, and digital radio chip manufacturing. Formerly known as Sagentia Group plc, the company rebranded in 2015 to reflect its broader scientific focus. With a market cap of approximately £207 million, Science Group serves clients globally, leveraging its strong UK and international presence. Its diversified service portfolio positions it as a critical player in the Industrials sector, particularly in high-growth areas like medical technology and smart devices.
Science Group plc presents a moderately attractive investment case with its diversified consultancy services and stable financials. The company’s low beta (0.399) suggests lower volatility compared to the broader market, appealing to risk-averse investors. With £41.5 million in cash and £15.5 million in debt, it maintains a healthy balance sheet. However, its modest net income (£12 million) and diluted EPS (26p) indicate limited profitability growth. The dividend yield (~3.1% based on a 16p/share payout) adds income appeal, but investors should monitor its ability to sustain cash flow (£18.5 million operating cash flow in FY 2024) amid competitive pressures in consultancy and tech manufacturing.
Science Group’s competitive advantage lies in its niche expertise in science-driven consultancy and regulatory compliance, particularly for highly regulated industries like healthcare and chemicals. Its Frontier Smart Technologies division differentiates it with hardware capabilities (e.g., digital radio chips), though this segment faces stiff competition from larger semiconductor firms. The company’s UK base provides access to Europe’s robust R&D ecosystem, but its small scale compared to global consultancies limits its ability to compete for large contracts. Its regulatory services are a strength, but rivals with deeper pockets could replicate this offering. The lack of significant capex (reported as £0) suggests reliance on organic growth, which may hinder scalability. Science Group’s hybrid model—combining consultancy and hardware—is unique but risks being outflanked by pure-play firms in either segment.